Power sector stakeholders oppose ECG concession agreement

The coalition of stakeholders on the Electricity Company of Ghana (ECG) concession arrangement has called on the government to review the Millennium Challenge Corporation (MCC) Compact II.

After a consultative meeting, the stakeholders said that there were challenges with the $498 million MCC Compact II passed by Parliament under the certificate of urgency which did not allow for further reading.

Vice President of think tank, IMANI Ghana, Kofi Bentle, presenting the report of the legal team of the coalition, said although the team supports the MCC Compact II, Article 7.1, which states that when the implementation process begins it shall not be subject to the laws of Ghana, restricts government and gives the investors- the US government, through the Millennium Development Authority (MiDA)- powers to do anything.

The article, which is a stabilization clause, is normal with international agreement when someone is coming to invest so on the face of it there is nothing wrong about that. However, it is dangerous for it to remain as it is.

“What we need is another clause to tie it down to specific areas where it is applicable and not leave it as an omnibus clause,” he said.

Mr. Kwame Jantuah, Oil and Gas analyst, touching on the local content, also disclosed that the compact was not bad but revealed that its operational process poses some challenges.

“It is not overtly clear the role of indigenous local content companies in the compact,” he said.

Mr. Jantuah said the group recommended the incorporation of clear local content and guidelines and monitoring mechanisms and sanctions.

A member of the Public Interest and Accountability Committee (PIAC), Dr. Steve Manteaw, on his part, called for the outright rejection of the MCC Compact II signed between Ghana and the US.

“The credibility of the whole concession arrangement has been shattered completely, we should reject it outright.”

He expressed unhappiness with attempts to try to make changes to the agreement.

One of ECG’s main problems is that it has not been able to invest in its operations largely because of government’s huge indebtedness to it. The ECG is also deemed to be inefficient, because of factors like obsolete equipment, he added.

“If government does not pay what it owes ECG, how on earth can ECG invest in its operations?

“Ghana is perfectly capable of managing its own affairs and similar concessionary endeavors in the past were not successful, he added.

Ghana and the Millennium Challenge Corporation of the US government signed the second compact in October 2016.

Under the compact, six projects- the ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project and Access Project- would be implemented.

The rest are Power Generation Sector Improvement Project and Energy Efficiency and Demand Side Management Project.